Thrift Savings Plan | Can Federal Employees Convert a TSP to ROTH TSP?

Are you trying to figure out if Federal Employees can convert their Thrift Savings Plan (TSP) to a ROTH TSP? Are you aware of the differences between a TSP transfer vs. a TSP rollover? In this video, we discuss how you can ultimately transfer money from your TSP to a ROTH IRA.

Leave a comment below if you have any other questions about how these transfers work!

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Micah Shilanski, CFP®
#PlanYourFederalRetirement #TSP

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[SK-mzpc]

Your background music is so distracting! I loved all the informer you provided though

[markmiller]

Before blanket statements are made comparing Roth to Regular TSP you must know EXACTLY how the state you work in now taxes the pension of a federal civil servant. Approx. 9 states that normally have income taxes (e.g. NY and PA) consider the TSP "part of" their civil servants pension and DO NOT tax it on withdrawal in retirement. This is significant because if you work in one of these states (and assuming you will retire there) and contribute to the regular TSP - you can escape state taxes altogether (which are not insignificant in states like NY) by contributing to the regular TSP. As unbelievable as it seems the money is not state taxed going into the regular TSP AND it is not state taxed when withdrawn as it is considered "part of" the civil servants pension in these states. However – if you contribute to the Roth TSP – you will pay state taxes on the money going in. Everything else being equal- you are actually losing money by contributing to the Roth TSP instead of the regular TSP in these states.

[NolanMartin]

Thanks Micah! Finally a breakdown of the TSP that I can actually understand!

[lareekriz]

Thanks for the helpful info but the music is a distraction.

[shoppersdream]

Nice, thanks! I came across your video for the first time. How would you advise a disabled veteran to invest a disability check that is tax-free in an investment firm? What type of account should be opened so we don't pay tax on tax-free disability checks. Thanks

[timdog]

Great video. Good information regarding the Roth IRA.

[joseCalderon]

Yeah. I only have $60k in my TSP, all traditional. I've started to use the Roth side for future contributions, so yeah. The TSP just adds those traditional Roth contributions into the $60k traditional that I already had in there plush the automatic 5% match into the Traditional side. I'm assuming that I will owe less taxes when everything is said and done

[RickMartinYouTube]

thanks for the information - nicely explained

[katcoz]

I recently switched my TSP from traditional to Roth. I also opened a Roth in a brokerage account to purchase stock, etc. Brokerage said max across all IRAs is $7k. But TSP says max is $22, 500 and an additional $7, 500 if over 50. I'm confused as to what i can put in the brokerage account now.

[lindad]

Can I transfer funds from my ROTH IRA to my ROTH TSP? If so, I can do transfer from Traditional TSP to my Roth IRA, then from the Roth IRA to my Roth TSP?

[cristypatiag]

What form can I used to do the transfer from my traditional TSP to outside IRA please

[tomatodo]

What are the cons of doing conversions directly from TSP to ROTH IRA?

[faustogonzalez]

Thank you so much, Job very well done.

[danareynolds]

So if I’m under 59 1/2 and still employed, my only option is to open a IRA and start contributing?

[pascaljoanne]

can you explain how to set up an IRA account? i want to withdraw all my money from TSP and put into an IRA...i am separated from gov't service and i meet the age

[hmj]

What if your end goal is to use your TSP for income (dividend payouts). When you retire can you transfer the TSP to an IRA, then inside the IRA purchase good dividend paying stocks for income? The thinking here is while your working take money and invest in the tsp and at the same time put money in a brokerage account where you invest in growth stocks and funds. Fast forward to retirement - take the brokerage account money and put a down payment on a house, transfer the tsp to an IRA and buy dividend paying stocks to pay the mortgage.

[dennish]

Very informative video! Can you have a TSP IRA and a civilian IRA?

[cindywood]

From watching your video, I know that I can't make a penalty fee transfer from my traditional civilian TSP to an IRA until I'm 59 1/2 years old. I am currently 55 and retired from the military at age 45. For my Uniformed Service TSP, is that treated any differently? Am I able to transfer money from my Uniformed Service TSP to a traditional IRA without penalty?

[MacCurtisHolisticHealthTalk]

That sounds great to open a Roth IRA. However, my TSP is more actively earning dividends & many banks Roth IRA's can not compare to the dividends earnerd in TSP. I still can open Roth IRA just to avoid paying some tax in future on my IRA's. Hopefully, TSP will change the rules in future??

[perfectlymprfct]

Hello, I max my TSP contributions and a Vanguard Roth. Can I contribute to the TSP Roth up to my annual max? If so, how? I don't see that option on myPay or on the TSP site. I'm paying too much in taxes and I won't need this money until after I'm retirement age.